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Consumer participation in the credit market during the COVID-19 pandemic and beyond

Author

Listed:
  • Evangelos Charalambakis
  • Federica Teppa
  • Athanasios Tsiortas

Abstract

This article analyses the consumer’s decision to apply for credit and the probability of the credit being accepted in the euro area during a period characterized by the unprecedented concomitance of events and changing borrowing conditions linked to the global coronavirus disease 2019 (COVID-19) pandemic and the Russian invasion of Ukraine. We use data between 2020Q1 and 2023Q2 from the ECB’s Consumer Expectations Survey. We find that credit demand is the highest when the first lockdown ends and it drops when supportive monetary compensation schemes are implemented. There is evidence that constrained households are significantly less likely to apply for credit. Credit is more likely to be accepted under favourable borrowing conditions and after the approval of national recovery plans. We also find that demographic, economic factors, perceptions, and expectations are associated with the demand for credit and the credit grant.

Suggested Citation

  • Evangelos Charalambakis & Federica Teppa & Athanasios Tsiortas, 2025. "Consumer participation in the credit market during the COVID-19 pandemic and beyond," Oxford Economic Papers, Oxford University Press, vol. 77(1), pages 119-143.
    • Handle: RePEc:oup:oxecpp:v:77:y:2025:i:1:p:119-143.
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    File URL: http://hdl.handle.net/10.1093/oep/gpae019
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    More about this item

    Keywords

    consumer finance; liquidity constraints; credit applications; consumer expectations survey;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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